As a seasoned crypto investor with over a decade of market experience under my belt, I must admit, this current market environment feels like a rollercoaster ride without a seatbelt. The recent Federal Reserve rate cut has sent shockwaves throughout all markets, and it’s fascinating to see the S&P 500 reaching new heights, while Bitcoin (BTC) is following suit with its own impressive surge.
Following the Federal Reserve’s decision to lower interest rates by half a percentage point, financial markets responded with considerable enthusiasm. The S&P 500 reached an unprecedented peak, while Bitcoin (BTC) experienced a significant jump of over $4,000. Could Bitcoin now mirror the trajectory of U.S. stocks and set its own record high?
Further potential growth across all markets
Following a Federal Reserve interest rate decrease after four years, markets have responded with a sense of relief. The S&P 500 surged past $5,700, and the Nasdaq has experienced a 2.6% improvement. Meanwhile, Bitcoin momentarily reached $64,000 on Friday before retreating below this resistance point.
Given that there might be an additional three interest rate reductions by the U.S. before year-end, there’s a strong possibility of expansion in all markets. At present, the S&P 500 is spearheading this growth, but Bitcoin (BTC), often seen as a more volatile investment option, could exceed expectations in a relaxed monetary policy setting.
S&P 500 breaks out to new all-time highs
Examining the weekly graph for the S&P 500, it appears that the price has been moving within an upward sloping channel since October 2022, except for a brief drop outside the channel in October 2023.
The price at $5,639, which was supported by the 1.618 Fibonacci level since early July, has been breached this week, with the price now steadily climbing above it. A new target of $6,967 is emerging, representing a 22% increase from the current price and aligning with the 2.618 Fibonacci level.
$BTC short term correction beginning?
Based on recent Bitcoin ($BTC) trends, there might be an impending correction. The price has recently started to decrease, and while it’s still early, all short-term Stochastic RSIs have reached their peak. This could indicate a potential reversal with momentum shifting towards a downward trend.
Based on the Fibonacci retracement levels shown on the chart, it’s reasonable to anticipate that the price might fall to the 0.382 Fib level, which is approximately $61,600. If a rebound occurs from this point, it would be a strong bullish sign. However, it’s also possible for the price to dip further down to the 0.618 Fib level, around $60,000.
$BTC approaching battle at $65,000 resistance
However, it’s the macro weekly chart that looks the most bullish. Yes, the price could possibly be held up in the short term, but the big battle at $65,000 looks as though it is going to take place.
In simpler terms, the bottom chart’s Stochastic RSI (Stochastic Relative Strength Index) might significantly influence the situation. If you look closely, the quick blue line has crossed above the 20 level, and if the slower orange line also crosses over that level, it could lead to some intense market activity for Bitcoin ($BTC). This could potentially give Bitcoin the momentum needed to overcome resistance and reach the top of the bull flag, resulting in a significant price increase.
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2024-09-20 12:13